TN 8 (07-23)

GN 04030.030 Reopening Deduction Determinations under Annual Earnings Test


20 CFR 404.452

A. Introduction

Under the annual earnings test an initial determination is made

  • after the close of the taxable year, (see GN 03101.070) or

  • when work deductions are imposed based on the earnings posted to the Master Earnings File (MEF), i.e. enforcement action (see GN 03101.090), or

  • when the adjudicator makes a special determination regarding the earnings for the year.

While the age of the worker is generally a factor in a work deduction determination, the age of the worker is usually determined at an earlier date. The factors to be considered regarding a determination on work deductions under the annual earnings test are the excess earnings in a taxable year and the months in which more than the monthly limit was earned or substantial services in self-employment were rendered.

B. Policy

If the determination of age was made more than 4 years prior to the determination of work deductions, then the age determination cannot be reopened unless one of the unrestricted reopening provisions applies (see GN 04020.000) or the DOB can be changed in accordance with GN 04030.010. Consequently, the only errors in prior deduction determinations which are subject to corrections are errors in the amount of excess earnings and the months against which work deductions may be applied. The established date of birth should be used when computing work deductions. If the DOB is being changed after 4 years in accordance with the policy in GN 04030.010, the annual earnings test(s) for prior years are final and can only be reopened and revised following the normal administrative finality rules.

Effective for taxable years starting after August 1958 where benefits were suspended for all entitlement months in the year, no benefit may be paid for a month of that taxable year unless the NH or someone entitled to benefits on the E/R filed a statement within 3 years, 3 months, and 15 days after the close of the taxable year. This statement must show that a payment is due for that month.

NOTE: In 1997, the regulations changed to state that we could consider the earnings posted to the Master Earnings File (MEF) to be the annual report of earnings required by law. For reports due on or after April 15, 1997, SSA may consider the information provided on the W-2 and the self-employment tax return to be the annual report. Although a beneficiary who is granted an extension for filing their tax return from IRS should also request an extension from SSA for filing their annual report. SSA will not develop to determine the date of filing tax returns when adjusting benefits under the earnings test. SSA assumes all postings to the (MEF) are based on timely filed tax returns.

C. References

RS 02510.022 – Extension for Filing Closed Year Work Reports

RS 02510.026 – Enforcement of AET

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GN 04030.030 - Reopening Deduction Determinations under Annual Earnings Test - 07/10/2023
Batch run: 07/10/2023